Tuesday, 16 December 2014

The edge: Hibiscus’ shareholders raised interest, says MD

KUALA LUMPUR: Key shareholders of junior oil and gas exploration company
Hibiscus Petroleum Bhd have increased their shareholding since its initial
public offering (IPO) in 2011, said managing director Dr Kenneth Pereira.

Pereira, in a written response to a story published by The Edge this week,
noted that Hibiscus’ top nine shareholders have been raising their interest in
the company since its listing to 67% currently.

According to data presented by Pereira and collected from Bloomberg, as of
yesterday, through Hibiscus Upstream Sdn Bhd, the company’s management team
held an 18.75% interest in Hibiscus. Its shareholdings rose from an initial
83.61 million shares post-IPO to 167.22 million shares currently.

Several other shareholders in the private oilfield services sector and an
investor in technology companies have also accumulated their shareholdings in
Hibiscus after its listing in 2011. According to Bloomberg, current substantial
shareholders of Hibiscus include Mercury Pacific Marine Pte Ltd (8.17%),
Littleton Holdings Pte Lte (5.99%) and Chye Tek Lee (5.06%), among others. Note
that Chye is the group chief executive officer and managing director of
Singapore-listed Ezra Holdings Limited and also non-executive chairman of EMAS
Offshore Limited.

Yesterday, Hibiscus announced to Bursa Malaysia that Datuk Sri Muhammad
Syafiq Baljit Abdullah increased his shareholding to 12.78% by acquiring 4.12
million shares from three transactions between Dec 8 and 12, making him the
company’s second-largest shareholder. Hibiscus shares shed 6.32% yesterday to
close at 89 sen a share, translating into a market capitalisation of RM793.6
million. Year-to-date, the stock has fallen 49.17%.

The story in The Edge highlighted accumulating losses at Hibiscus which may
have contributed to the stock’s recent poor performance.

“It is well known and widely reported that the share prices of oil and gas
companies have been adversely affected by the slide in oil prices, both in
Malaysia and worldwide. We do not understand the grounds for stating that the
share price decline is due to accumulating losses when other oil and gas
companies are also suffering from price declines,” said Pereira.

He also noted that Hibiscus’ share price has been resilient, substantiated
by the fact that even with a 99.6% warrant conversion rate in July 2014, the
company’s market capitalisation has been reasonably stable.Meanwhile, Pereira also emphasised that Hibiscus had drilled two wells from
November 2013 to February 2014, culminating in the first offshore discovery in
the east of Oman after almost 40 years of exploration in the region by several
other companies.

“Our 50% success rate in exploration drilling is significantly higher than
the global average, where approximately one out of seven wells are successful,”
said Pereira.

This article first appeared in The Edge Financial Daily, on
December 16, 2014.